Apex Law Journal
Apex Law Journal
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Neha Goel, Advocate

Advisory Board

S.C. Khunger, Advocate

Rohit Bansal, Advocate

Varinder Singh Kanwar, Advocate

Hittan Nehra, Advocate

Judgments on Chandigarh (Sale of Sites and Buildings) Rules, 1960

Friday, February 26, 2010
Chandigarh (Sale of Sites and Buildings) Rules, 1960

Chandigarh (Sale of Sites and Buildings) Rules, 1960 — Rule 7-A (2) — Demand of additional penalty — In the present case, in view of the fact that the appellents had surrendered the site after taking possession, respondent no. 2 imposed penalty @ 2.5% of the premium — Said penalty was deposited by the appellant no.1 — After two years and six months of the acceptance of surrender of the site, respondent no. 2 again issued a notice to the appellants requiring them to deposit Rs.3,38,082/- — This was done on the premise that inadvertently penalty @ 2.5% of the premium had been imposed at the time of acceptance of surrender of the site, though in terms of Rule 7-A(2) of the Rules, penalty @ 5% of the premium ought to have been imposed — Appellant No.1 contested the demand by asserting that notice had been issued by the concerned officer without taking cognizance of the fact that surrender had already been accepted — Simultaneously, he prayed for withdrawal of the request of surrender by stating that he was ready to deposit 25% premium — Respondent No.2 declined to accept the aforementioned request made by appellant No.1 and again called upon him to deposit penalty amount — The appellants challenged the demand of additional penalty and rejection of their prayer for withdrawal of the request for surrender of the site by filing writ petition under Article 226 of the Constitution — The High Court refused to quash the demand of additional penalty on the ground that the appellants’ case is covered by Rule 7-A(2) of the Rules which provides for imposition of penalty @ 5% of the premium and Rule 7-A(1) is not attracted in their case because they had applied for surrender of the site after physical possession thereof had been delivered to them — Held, it is not in dispute that the appellants’ had surrendered the site after taking possession thereof — Therefore, in principle we agree with the High Court that sub-rule (2) of Rule 7-A was applicable to their case and respondent No.2 did not commit any illegality when he called upon them to pay balance penalty @ 2.5% of the premium — However, keeping in view the fact that the demand for the balance penalty was made after more than 2 years and 6 months of the acceptance of surrender of the site and the appellants’ legitimate prayer for withdrawal of the letter of surrender was rejected without any tangible reason, the High Court should have quashed the demand raised by respondent No.2 on the ground of arbitrary exercise of power and violation of the doctrine of fairness in state action — Appeal allowed — Prayer made by the appellants accepted and demand raised by respondent No.2 vide notices dated 5.11.2007 and 26.12.2007 quashed.

 
Chandigarh (Sale of Sites and Buildings) Rules, 1960

Chandigarh (Sale of Sites and Buildings) Rules, 1960 — Rule 7-A (1) and (2) — Interpretation of — Held, subrule (1) of Rule 7-A is attracted if the transferee who has paid 25% of the premium of the site, surrenders the same within 180 days of the allotment and that too before possession of the site is offered by the competent authority — In such a case, the surrender can be accepted by the competent authority subject to deduction of penalty @ 2.5% of the premium — If the surrender is made after the possession is offered by the competent authority, penalty @ 5% of the premium is leviable in terms of sub-rule (2) of Rule 7- A irrespective of the fact that the surrender is made within 180 days — To put it differently, if a transferee who has paid 25% of the premium and to whom possession is offered by the competent authority, surrenders the site then penalty @ 5% of the premium is leviable and he cannot avoid this consequence only on the premise that the surrender was made within 180 days of the allotment.

 
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